The Dow Jones fell 0.18% while the Nasdaq rose 0.40% and the broader S&P 500 index 0.14%.
The indices had fallen sharply on Tuesday in the face of an intervention by Fed boss Jerome Powell, who stressed before a Senate committee that the monetary institution, which has been raising its rates for a year to fight against inflation, should probably do more.
The Fed’s main policy rate could go beyond the level at which institution officials have seen it so far stop, at 5.1%, and stay there for some time, he pointed out. .
On Wednesday, during a hearing before the House of Representatives, Jerome Powell specified that “no decision (had) been taken” and in particular that the amplitude of the next rate hike, a quarter or a half point of percentage, would depend on the indicators.
Before the next meeting of the Fed’s monetary policy committee, on March 21 and 22, the institution’s officials will have several important new reports, on the labor market and inflation, at their disposal.
Employment figures released on Wednesday raised speculation that the Fed is tightening monetary policy in an attempt to slow economic activity, and hence inflation. According to a monthly ADP/Stanford Lab survey, private sector companies in the United States created 242,000 jobs in February, more than in January and than expected, a sign that the American labor market remains in excellent health.
“This has investors concerned that the official employment report due Friday is stronger than expected,” said Sam Stovall of CFRA.
According to him, investors are also monitoring the widening of the gap between the two-year debt rate of the United States, which rose above the 5% threshold on Tuesday, and that of 10 years, which is also increasing but less. quickly.
Such a development, associated with other elements such as the decline in corporate profits or a one-year decline in leading economic indicators, “has proven in the past to represent the early signal of a recession”, underlines Sam Stovall. “This is fueling investor concerns.”
On the stock front, Occidental Petroleum rose 2.14% as investor Warren Buffett’s holding company, Berskhire Hathaway, said it had further increased its stake in the company.
Tesla fell 3.04%. The NHTSA, an agency responsible for road safety in the United States, said it had opened an investigation into one of the group’s models after two reports of steering wheels having come off while the car was driving.
Shared-office specialist WeWork rose 4.39% after a New York Times article reported that the company was in discussions with investors for a debt restructuring and a new fundraising.
